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In the last two days, I have come across the same story twice: I have been involved in a car collision that was not my fault and my auto insurance told me I had to file a claim with the other party. WRONG!

In fact, this could not be more wrong. There are three reasons this is wrong:

Your insurance policy requires you to report all claims to the insurance company. You MUST report a claim. So, why would they refuse to take it?

Your insurance company has an obligation to pay any claim that is covered. By law in California, they cannot tell you no.

Your rates do not go up for filing a claim.

The simple truth is that insurance companies do not want to take your claim because they do not want to pay out money. They want to keep their money as long as possible. If they can discourage you from filing a claim, it is one less claim to deal with and more money for them to keep.

If you have been in a collision, report it to your insurance company. If they tell you no, tell them you want to anyway.

Okay, so when you watch tv these days, you are bombarded with insurance commercials. You hear about accident forgiveness, pet coverage, coverage if your car is beamed up by Scotty. It is amazing how many different coverages you can get for your car.

Remember, however, that car insurance is meant to cover two things: your car and any damage you cause to anyone else. Any other coverage you get is called "throw away coverage." Why? Because the insurance companies give it to you and throw away any money it costs them. Why? Because they get people to change their insurance company based on these coverages. Yes, people actually change to a new insurance company because they can get pet coverage.

Look, if insurance companies, or more importantly, insurance regulators thought it was important, it would be offered by every insurance company or even required. But it is not. It is a marketing ploy. And a bad one at that.

You do not need any insurance coverage. If you do not know what coverage you need, email me at insbook@jonathangstein.com and I will send you the Consumers Guide to Auto Insurance FREE (a $20 value).

No, not for rating reasons. At least, not this time. When you complete your insurance application, you have to list the zip code where the vehicle will be garaged. This is information the insurance company uses.

When you move, you need to let the insurance company know. This may be a temporary move. For example, maybe you move for college. Or, your child goes off to college. You need to let the insurance company know. Maybe it is a permanent move and you have a PO Box for your mailing, but you move from zip code 12345 to 12346. It may not seem like much, but it is important.

What happens if you do not notify the insurer of your move? Your claim could be denied. The insurance company will consider it a "material misrepresentation." This means they can deny your claim and even cancel your policy.

Make sure you give the insurance company this information as the potential downside outweighs the amount of time it will take to give it to them.

DISCLAIMER

Notice

This blog is made available by the lawyer publisher for educational purposes only as well as to give information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Jonathan G. Stein, is licensed to practice law in the state of California only.
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